Cherry Picking?

It’s true, as Marie Cocco notes in a recent column, that Barack Obama’s health care plan wouldn’t provide true universal coverage. Because it does not include a mandate (except for children), it’s virtually guaranteed that some individuals wouldn’t sign up for coverage. On the other hand, I’m not sure how Cocco arrives at the following conclusion:

But it [Obama’s plan] still fails to recognize that without some kind of mandate to bring everyone into the system — either an individual mandate, like his Democratic rivals Hillary Clinton and John Edwards proposed, or a nationwide requirement, such as a Medicare-for-all type of system — insurance companies still would be able to cherry-pick among those they want to insure and those they don’t.

Obama’s plan explicitly includes a provision known as “guaranteed issue” that doesn’t let health insurance companies turn people away for health reasons. Here’s how his campaign website summarizes it:

Guaranteed eligibility. No American will be turned away from any insurance plan because of illness or pre-existing conditions.

Problem is, it’s not clear that guaranteed issue and other measures which prohibit insurers from accounting individual risk factors is really a good idea. One study last year found that states which had implemented both guaranteed issue and community rating, which prohibits insurers from taking age and gender into account, resulted in worse coverage overall, saying that:

[S]tates that implemented guarantee issue and community rating saw a rise in insurance premiums, a reduction of individual insurance enrollment, and an exodus of health insurers from the individual insurance market. In addition, the report found no significant decrease in the uninsured population in states that implemented these initiatives, often a stated goal of legislators.

In other words, there’s some reason to be skeptical that the sort of additional regulation of insurers Obama proposes will actually provide the promised results.